Neutral InterGlobe Aviation; target of Rs 2630: Motilal Oswal

Neutral

Motilal Oswal's research report on InterGlobe Aviation

IndiGo reported a PAT of INR30.9b, higher than our expectation, on account of an increased scale and efficiency in operations, lower fuel costs and favorable forex. Revenue passenger kilometers (RPK) came in at 29b. Passenger load factor (PLF) was higher at 88.7%, with available seat kilometers (ASK) at 32.7b (est. 31.5b) and yield at INR5.2 (est. INR4.3).  Capacity guidance of achieving mid-teens growth in FY24 remains intact as the airline targets to service 100m customers in FY24. Management has guided that it would add 25% capacity in 2QFY24 vs. 2QFY23. While yield is likely to drop in the ensuing quarter due to seasonality, management believes that the load factor is going to be better in the coming quarters as historically visible.

Outlook

Therefore, we increase our EPS estimate by 138%/ 51% for FY24/FY25. We reiterate our Neutral rating on the stock with a TP of INR2,630 premised on 8x FY25E EV/EBIDTAR.

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InterGlobe Aviation - 03 -08 - 2023 - moti